Monday, June 24, 2013

Pell Grants, Student Loans and Government "Help"

Everybody agrees that education is a good thing.

Every American deserves the opportunity (there's that word again) to secure a quality education at an affordable cost.

But vouchers are not something on which we all agree. Teachers unions and the status quo politicians argue against them. We can't trust the people, I guess.

But we sure can trust the government knows best gang to collect, distribute and spend our money well. Or can we?

Student-Aid Scams Targeted by Schools, Government supports the reasoning gave by bank robber Willie Sutton as to why he robbed banks --- because that's where the money was:

"Federal officials are cracking down on fraud in student-aid programs, responding to evidence that a growing number of recipients—acting alone or as part of organized crime rings—are pocketing federal loans and grants without any intent of going to school.

The Education Department in January began using a database to flag applicants for federal Pell grants who have an "unusual enrollment history"—having received aid for three or more schools within a year, primarily. The department sends the names to colleges and universities, which then ask applicants to provide prior transcripts and other documents. A school can deny a grant or loan if it deems the applicant's responses to be unsatisfactory. . . .
Roughly $829 million in Pell grants in the fiscal year that ended last September were "improper payments," which includes fraud and disbursements due to clerical errors, the Education Department reported last year. That was down from the previous two years, but up 86% from 2007. Improper payments through the federal student-loan program more than doubled last year from the year before to $614 million.

More than 34,000 participants in crime rings improperly received federal student aid last year, up 82% from 2009, the department's inspector general estimated this month.
Justin Draeger, president of the National Association of Student Financial Aid Administrators, said while schools are trying to curb fraud, they strive to get aid to deserving students. "Schools are constantly trying to find the right balance here."...

Joan Zanders, director of financial aid at Northern Virginia, said most aid recipients use the funds properly. But she has seen an increase in suspicious aid applications in recent years.

"We started seeing student borrowing that was just over the top with no explanation for why," Ms. Zanders said. "We have individuals that have told me, 'I spent all this money on graduate school. I can't get a job. I'm living in somebody's basement. I can't afford to live, I need the money.' It's not so much about the education, it's the money."

Federal Pell grants don't have to be repaid and are designed to go to the neediest students. The maximum annual award is $5,550. The government's most popular borrowing program, Stafford loans, allow undergraduates to borrow up to $57,500 over their lifetime and graduate students up to $138,500.

Most federal student aid requires no credit check and comes with few restrictions on how the money is spent. Schools get the first cut of the grants and loans to cover tuition, then make checks to students for the remaining amount to pay for books, transportation expenses, rent and other living expenses for the semester.

Community colleges are a chief target for fraud because they often have open enrollment, meaning anyone can attend regardless of their academic background, and low tuition. The lower the tuition, the more money is left over from a grant or loan to cover living expenses.

At Henry Ford Community College, in Dearborn, Mich., for example, a full-time, independent student can receive up to roughly $11,000 in aid to cover living expenses over two semesters, said Stephanie Latzke, the school's assistant director of financial aid. . . .

At community colleges and online schools, borrowers can often obtain tens of thousands of dollars in aid by applying via the Web, without ever stepping foot on campus or talking to a school official."

Summing Up

Fear not, my fellow American taxpayers.

Both our trustworthy and fiscally responsible government knows best gang and college administrators are on the job.  And if you believe that, .................!

The only problem --- it's not their money.

In fact, in the case of the colleges, the more student loans, the more money for the teachers and administrators.

Only the taxpayers get screwed --- but there's nothing new about that.

Thanks. Bob.

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